Volvo CEO urges EU to slash its tariffs on US – Business News
Volvo CEO Hakan Samuelsson urged the European Union to slash its auto tariffs on the US — an obvious bid to sway President Trump to decrease his own hefty duties on international automobiles.
The automaker, which is majority-owned by China’s Geely Holding, at present faces a steep 27.5% tariff on its imports.
The EU, in the meantime, has a 10% tariff on American-made automobiles.
Volvo CEO Hakan Samuelsson urged the EU to slash its auto tariffs on the US. through REUTERS
“If Europe is for free trade, we should be the ones showing the way and going down to very low tariffs first,” Samuelsson instructed Reuters during an interview Thursday.
“I think it’s absolutely unnecessary, the European car industry definitely does not need to have any protection from American auto builders,” he instructed Reuters on Thursday.
Trump has touted the auto tariffs as a success, arguing that they’ve incentivized producers to return to the US.
He has threatened to raise the taxes on EU-made automobiles to 30% beginning August 1.
In April, he slapped a 25% tax on auto imports, which stacked on high of a 2.5% tariff that was already in place.
The president has additionally hit auto elements with further levies.
Prior to Trump’s second time period, the US had simply the two.5% tariff on EU-made automobiles whereas the 27-nation commerce bloc had a 10% obligation on American-made automobiles – which Samuelsson has referred to as unfair.
New Volvo cars await transport at a terminal in Baltimore, Maryland. JIM LO SCALZO/EPA-EFE / Shutterstock
Volvo is especially uncovered to the tariffs, as most of its automobiles offered within the US are imported from Europe.
As a outcome, the automaker is planning to transfer some manufacturing plans to the US.
It introduced Wednesday that it might begin manufacturing of its best-selling hybrid XC60 within the US subsequent yr.
The model’s South Carolina plant at present produces simply the Polestar 3 and EX90, an electric vehicle that has struggled to gain gross sales traction within the US.
But the automaker has additionally began to cut down on its choices within the US, in accordance to Reuters.
“These are the measures we have control over, rather than when it comes to tariffs we can only have an opinion like everybody else,” Samuelsson mentioned.
President Trump unveiled hefty tariffs on many countries in April. AFP through Getty Images
Shares in Volvo plummeted 2.6% Wednesday after the company reported a sharp drop in quarterly revenue, though it beat analyst expectations.
The automaker reported second-quarter adjusted working revenue of 2.9 billion Swedish crowns, or $297.06 million, down massively from 8 billion crowns, or $819.48 million, the yr earlier than.
Its gross margin fell to 13.5% from 18.2% the quarter earlier than, although it stood at 17.7% when adjusted for one-off impacts.
Extra prices from tariffs, in addition to elevated Chinese competitors and muted demand for electric automobiles, made for a tough quarter.
Volvo introduced a $1.2 billion impairment charge associated to delays in model launches and tariffs, main to an working loss of 10 billion crowns, or $1.02 billion. That’s up from 8 billion crowns in the identical period final yr.
